Microsoft is having its third large customer event of the year in Toronto right now, the Worldwide Partner Conference (WPC) and as to be expected there are a number of announcements to be made. Given its ramifications, I picked the announcement of both GE and Microsoft to bring the GE PaaS Predix to the Microsoft IaaS, Azure. 
So let’s take apart the press release in our customary style it can be found here:
TORONTO — July 11, 2016 — GE (NYSE: GE) and Microsoft Corp. (Nasdaq: “MSFT”) today announced a partnership that will make GE’s Predix platform for the Industrial Internet available on the Microsoft Azure cloud for industrial businesses. The move marks the first step in a broad strategic collaboration between the two companies, which will allow customers around the world to capture intelligence from their industrial assets and take advantage of Microsoft’s enterprise cloud applications.
MyPOV – Good summary, also makes right away clear that GE and Microsoft are partnering for something bigger and brining Predix to Azure was only one part of the partnership... more on that in the analysis below.
[…] As businesses look to connect their industrial machines from the edge to the cloud, bringing Predix to Azure gives customers greater choice and flexibility to securely harness the power of data from machines and systems of intelligence. Companies worldwide will be able to bridge the divide between the operational and information technologies that make up the Industrial Internet of Things.
MyPOV – Good to see a description of the opportunity, and stating the main benefit for customers, more choice and flexibility – always a win for customers. Microsoft also got mention on what the company is banking a lot (and CEO Nadella talks about) – systems of intelligence. And GE got in the IoT moniker of the ‘Industrial Internet of Things’.
“Connecting industrial machines to the internet through the cloud is a huge step toward simplifying business processes and reimagining how work gets done,” said Jeff Immelt, CEO of GE. “GE is helping its customers extract value from the vast quantities of data coming out of those machines and is building an ecosystem of industry-leading partners like Microsoft that will allow the Industrial Internet to thrive on a global scale.”
MyPOV – Good quote by Immelt, maybe a tad too much on the information discovery side, less on that aspect that IoT platforms need to (and do) steer the things, too. But it maybe the extent of the partnership with Microsoft at the moment.
As the shift to a more industrialized information age continues, the opportunity to deliver new digital solutions, insights and increased efficiencies is accelerating the need for higher level services. GE’s Predix platform is already helping industrial customers rapidly build, securely deploy and effectively operate industrial applications. Bringing Predix to Azure means those same customers will now have access to additional capabilities such as natural language technology, artificial intelligence, advanced data visualization and enterprise application integration.
MyPOV – And here we read what Predix really is – a purpose built PaaS for IoT. And good to see the attraction to Azure comes from natural language technology, AI, visualization, and enterprise application integration. The latter comes to a certain point as a surprise, but interesting it found it in the press release.
Azure will support the growth of the entire industrial IoT ecosystem by offering Predix customers access to the largest cloud footprint available today, along with data sovereignty, hybrid capabilities, and advanced developer and data services. In addition, GE and Microsoft plan to integrate Predix with Azure IoT Suite and Cortana Intelligence Suite along with Microsoft business applications, such as Office 365, Dynamics 365 and Power BI, in order to connect industrial data with business processes and analytics.
MyPOV – Good to see more specifics and glad to see that data sovereignty found a mention, a huge concern on the right side of the Atlantic, and an area to which Microsoft has paid a lot of attention. Also good to see the Azure IoT Suite mentioned, anything else would have been an area of concern, but this means that lower level connectivity to things will come via / through Azure. No surprise on Cortana Intelligence Suite, that was already pre viewed earlier in the press release. And certainly no surprise on Office 365, Dynamics 365 (with new 365 addition!) as well as Power BI. This is ‘music’ to the partners at WPC.
“Every industry and every company around the world is being transformed by digital technology,” said Satya Nadella, CEO, Microsoft. “Working with companies like GE, we can reach a new set of customers to help them accelerate their transformation across every line of business — from the factory floor to smart buildings.”
MyPOV – Good quote for Nadella, surprisingly candid – that the partnership is helping Microsoft to reach new customers. Seldom CEOs are so clear, good to see.
A developer preview will be released toward the end of 2016, and Predix on Azure will be commercially available by the second quarter of 2017. More information about Microsoft and GE’s partnership will be shared at Predix Transform, July 25–27 in Las Vegas, and Minds + Machines, Nov. 15–16 in San Francisco.
MyPOV – Good to see tangible time lines and milestones in a press release. De facto this means that substantial deployments of the partnership will be out into 2017.

Overall MyPOV

This is the second ‘mega’ partnership Microsoft announces – after the Azure partnership with SAP, the focus with GE though is on next generation applications, building IoT solutions with GE’s Predix. Both partnerships are important for Microsoft as they bring ‘load’ to Azure, and load is what power the economics of scale that make IaaS providers competitive. Microsoft needs these partnerships to fuel Azure growth post the era of the current number one growth engine for Azure – Office conversions.

For GE it is likely a good move, after partnering with AWS for IaaS earlier, Predix becomes effectively ‘multi cloud’, something enterprise want from a multitude of benefits: Commercial acumen, data sovereignty challenges, performance, are just the first that come to mind. From an overall uptake of Predix, the move comes early, as adding another IaaS means more testing, Q&A and documentation efforts. And using some of the Microsoft specific advantages, e.g. in AI, Speech and Machine Learning, means that GE will have to find a way to fork / abstract code for Predix. Something GE would ultimately have to do, but the point comes early in the life of Predix and the ‘tax’ for the additional deployment would have to ‘paid’ from now on. On the flipside this would have to happen sooner than later anyway and GE has the deep pockets on its quest to become a double digit billion software company, so not too much of a concern.

Unconfirmed on the technical details – so we are speculating here – the big winner behind the scenes is Pivotal / CloudFoundry, in which both GE and Microsoft are investors. As CloudFoundry provides cloud portability / multi cloud support this is going to be key benefit and showcase for the PaaS vendor’s deployment capabilities.

The winner of all of this are enterprises that are looking to fuel their next generation application platform needs with the help of GE and Microsoft. A purpose built PaaS platform like Predix cannot be passed over easily by CxOs, now that Predix gains another deployment IaaS, things look even more compelling for the platform. Especially global enterprise know that the rollout of the top 3 IaaS players with AWS, Microsoft and Google does not cover the world well enough form both a performance (that matters more to IoT) and data sovereignty (that matters less to IoT, as legislatures are just getting up to speed on the Safe Harbor replacement Privacy Shield these days). And most large enterprises are already Microsoft customers, so when they show interest into IoT, time to negotiate and throw in some Azure credits for this (which we expect Microsoft to possible even to proactively). The only concern at the moment is the relatively far out timeline with end of 2016 – making 2017 the realistic product deployment, but enterprises can start with Predix now – deploy e.g. on AWS and then later to Azure, true multi-cloud in the plans.

So for now congrats to both vendors on a key partnership, with a not mentioned (CloudFoundry) 3rd party laughing on the sidelines of this press release.

More on Microsoft:
  • Market Move - Microsoft acquired Linked - Tons of synergies, start with Cortana, maybe too many - read here
  • News Analysis - Microsoft opens Windows Holographic to partners for a new era of mixed reality - read here
  • News Analysis - SAP and Microsoft usher in new era of partnership to accelerate digital transformation in the cloud - read here
  • Musings - Will Microsoft's Hololens transform the Future of Work? Read here
  • Event Report - Microsoft Build 2016 - A platform vision and plenty of tools for next generation applications - read here
  • First Take - Microsoft Build 2016 - Day 1 Keynote Takeaways - read here
  • Event Preview - Microsoft Build 2016 - Top 3 Things to watch for developers, managers and execs...  read here
  • News Analysis - Microsoft - New Hybrid Offerings Deliver Bottomless Capacity for Today's Data Explosion - read here
  • News Analysis - Welcoming the Xamarin team to Microsoft - read here
  • News Analysis - Microsoft announcements at Convergence Barcelona - Office365. Dynamics CRM and Power Apps 
  • News Analysis - Microsoft expands Azure Data Lake to unleash big data productivity - Good move - time to catch up - read here
  • News Analysis - Microsoft and Salesforce Strengthen Strategic Partnership at Dreamforce 2015 - Good for joint customers - read here
  • News Analyis - NetSuite announced Cloud Alliance with Microsoft - read here
  • Event Report - Microsoft Build - Microsoft really wants to make developers' lives easier - read here
  • First Hand with Microsoft Hololens - read here
  • Event Report - Microsoft TechEd - Top 3 Enterprise takeaways - read here
  • First Take - Microsoft discovers data ambience and delivers an organic approach to in memory database - read here
  • Event Report - Microsoft Build - Azure grows and blossoms - enough for enterprises (yet)? Read here.
  • Event Report - Microsoft Build Day 1 Keynote - Top Enterprise Takeaways - read here.
  • Microsoft gets even more serious about devices - acquire Nokia - read here.
  • Microsoft does not need one new CEO - but six - read here.
  • Microsoft makes the cloud a platform play - Or: Azure and her 7 friends - read here.
  • How the Cloud can make the unlikeliest bedfellows - read here.
  • How hard is multi-channel CRM in 2013? - Read here.
  • How hard is it to install Office 365? Or: The harsh reality of customer support - read here.

More on GE:
  • Event Report - GE Minds & Machines - Good start - a platform for the Industrial Internet - read here

More on Pivotal / Cloud Foundry
  • Event Report - Cloud Foundry Cloud Foundry Summit - It's good to be king of PaaS - read here
  • News Analysis - Pivotal makes Cloud Foundry more about multi-cloud - read here
  • News Analysis - Pivotal pivots to OpenSource and Hortonworks - Or: OpenSource keeps winning - read here
  • New Analysis: Pivotal Now Makes It Easier Than Ever to Take Software from Idea to Production - read here

More on Next Generation Applications:
  • Event Report - Google I/O 2016 - Android N soon, Google assistant sooner and VR / AR later - read here
  • News Analysis - SAP and Microsoft usher in new era of partnership to accelerate digital transformation in the cloud - read here
  • Event Report - OpenStack Summit 2016 - Austin - OpenStack matures, grows up - read here
  • First Take - Workato’s Workbot cuts business users some slack with Slack integration - read here
  • Progress Report - Cloudera is all in with Hadoop - now off to verticals - read here
  • First Take - SAP Cloud for Planning - The next spreadsheet killer is off to a good start - read here
  • Market Move - Oracle buys Datalogix - moves into DaaS - read here
  • News Analysis - SAP commits to Cloud Foundry and OpenStack - Key Steps - but what is the direction? Read here
  • Event Report - MongoDB is a showcase for the power of Open Source in the enterprise - read here
  • Musings - A manifesto: What are 'true' analytics? Read here
  • Future of Work - One Spreadsheet at the time - Informatica Springbok - read here
  • Musings - The Era of the no-design Database - Read here
  • Mendix - the other path to build software - read here
  • Musings - Time to ditch your datawarehouse .... - Read here
Find more coverage on the Constellation Research website here and checkout my magazine on Flipboard and my YouTube channel here. Oh yes and on Slideshare, here

Business Research Themes